If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently, and assume the risk-free rate is 5%. A) Portfolio A Market B) Portfolio A Market Portfolio A Market D) Portfolio A Market Expected Return Expected Return Expected Return Expected Return only one is possible Beta 20 % 0.7 20 % 1.0 Standard Deviation 23 18 Beta % 7 % Beta % 15 % 23 % 0.7 18 % 1.0 33.5 % 1.9 20 % 1.0
If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently, and assume the risk-free rate is 5%. A) Portfolio A Market B) Portfolio A Market Portfolio A Market D) Portfolio A Market Expected Return Expected Return Expected Return Expected Return only one is possible Beta 20 % 0.7 20 % 1.0 Standard Deviation 23 18 Beta % 7 % Beta % 15 % 23 % 0.7 18 % 1.0 33.5 % 1.9 20 % 1.0
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 13QTD
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